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Friday 10 January 2020

How did one of Australia's leading wine producers crash and burn?

How on earth did that happen? 

The Australian wine industry has been in shock this week at the news that the McWilliams Wines Group - Australia's sixth-biggest wine producer - has gone into voluntary administration. 

McWilliams is a member of Australia's First Families of Wine and has been in business for six generations and 141 years. 

The company's brands include McWilliams, Hanwood Estate and Mount Pleasant and the company has major vineyard holdings in the Hunter Valley and the Riverina. 

KMPG partners Gayle Dickerson, Tim Mableson and Ryan Eagle were appointed this week after McWilliams said a number of factors contributed to the decision and to a decline in business performance.

Dickerson, Restructuring Services Partner for KPMG Australia said: “We are in the initial phase of the administration process where our priority is to undertake an immediate assessment of the business and its operations.

“The company will continue to operate as normal and we are working with the McWilliams’ family with the support of its employees while we work hard to try to preserve one of Australia’s oldest winemakers.

"We are seeking expressions of interest to recapitalise or acquire the group to take this heritage brand forward in the future both locally and globally.

“There are significant wine assets in the Riverina district and the Hunter Valley, long established distribution channels and relationships with global international distributor brands.”

Jim Brayne, a former chief winemaker and chairman of McWilliams Wine Group, said the group will work with the administrators to find a positive outcome for the business.

“We have not made the decision to enter into voluntary administration lightly,” Brayne said. “A number of factors have contributed to a decline in business performance, including evolving structural market dynamics and capital constraints." 

Evolving structural market dynamics is business gobbledygook for "we read the market wrong". 

In addition to having its base in warm regions when cool-climate regions are very much in vogue, McWilliams is also, in my opinion, very old fashioned in its approach. 

In a fashion industry its labels are dreary and its marketing approach has been dismal in recent years. 

The wines made by Jim Chatto and now Adrian Sparks have been very good - and often excellent value - but the brand has been lacking an excitement factor and had hit and miss media relations. That can be fatal in such a competitive marketplace. 

A very staid company that perhaps lived too much on past glories. That's my take, anyway. There may also have been several other factors of which I am not aware. 

The company is also the sole Australian distributor for Champagne Taittinger, Mateus, Henkell and Mionetto. All customers, growers, suppliers and key stakeholders will be contacted directly and a meeting of the creditors of the company is scheduled for Monday, January 20. 

1 comment:

  1. A good read, Winsor. Totally agree about the notion of wine being fashion. Living off past glories doesn’t cut it with today’s wine buyers.